The much awaited USDA report was neutral to slightly friendly for wheat, pegging the US spring wheat area some 600,000 acres below trade expectations. US Jun 1st stocks were however towards the top end of trade estimates at 743 million bushels.

US corn plantings came in above trade forecasts at 96.4 million acres, half a million higher than predicted in March and a hefty 4.5 million up on 2011. Soybean plantings were also increased by 0.5 million acres more than anticipated at 76.0 million acres, some 1.1 million up on last year.

Attention very quickly turned back to US weather however, and after a very brief dip that lasted no more than ten minutes after the news came out, the market was back up to where it had been before the announcement.

The trade will now start to focus on the USDA's yield estimates, revised versions of which will be issued on July 11th.

Outside markets surged on optimism on Europe, with crude oil gaining more than USD4.00/barrel and stock markets also posting strong gains. How long the euphoria lives remains to be seen, recent similar rallies have evaporated within a day or two once traders pick through the details (if there are any) of previous stimulus packages.

In Europe Coceral cut their EU-27 soft wheat production estimate by around 1 MMT due to losses in eastern member states. However output amongst the three main protagonists was increased following beneficial spring rains. France's crop was upgraded to 35.15 MMT, with Germany's now seen at 22.71 MMT and the UK's raised to 15.73 MMT.

At home the HGCA said for wheat that: "Overall yield potential remains good but the weather in the next next 4 weeks will be critical as crops move into the important grain fill phase."

Winter barley they said is "midway through grain fill with the earliest crops starting to ripen, but development has been slowed by the cool June temperatures, so harvest may be slightly later than normal." Yield potential was still "good" they added.

"Winter oilseed rape crops are typically at green seed stage and will soon move into the ripening phase. Crop development is behind recent years and this is& likely to lead to a later start to harvest. Lodging is the biggest issue at the moment with around 50% of the crop area affected to some degree which will affect ripening and potentially increase harvest losses," they concluded.